The U.S. and Japan moved swiftly to warn China to refrain from escalating territorial tensions in the East China Sea, after Beijing stepped up the ante in its dispute with Tokyo by declaring a new air defense zone covering islands claimed by both nations.

Hours after China unveiled its new air defense identification zone, or ADIZ, on Saturday, warning of military action against foreign aircraft that don't honor its enforcement, U.S. Secretary of State John Kerry and Secretary of Defense Chuck Hagel sharply criticized...